• Irina Kavchik

API versus File-Based integration for the AP automation



The key component of every AP automation software is its integration with accounting or ERP solutions.


In this article, we will review the pros and cons of API integration, file-based integration, and a mix of both when choosing an AP automation software.


Integration is what connects the two or more systems together. It allows different software applications to communicate with each other and perform in a unified manner. Integration is a strategic investment to streamline your internal workflows and business processes.


The communication between the two systems usually implies syncing various data sets, depending on the solution's purposes.


For accounts payable, usually, the integration requirement involves importing data such as accounts, rates, and suppliers to the AP software and exporting completed invoices, including the original file attachment.


Here's an example of the data flow between Ocerra AP software and MYOB. Depending on your accounting or ERP system and the AP software provider, this will differ.


Learning about the integration when shopping for the AP software will help you make a knowledgeable decision. Let's dive in and review each integration in more detail.


AP Automation: The API integration


The API integration has an automated connection between the two systems. It allows synchronising data and updating changes automatically. For example, you may want to create a new supplier in one system, which will automatically sync to another. It works with cloud services only.


Pros of the API integration


The API integration is a powerful tool to streamline your business processes.


Not only does it facilitate the automation of routine processes, but it goes deep into your accounting or ERP system to reproduce the same functionalities. The integration has to follow the same business logic to allow you to perform the same business tasks without any hassle.


For example, it takes care of financial periods, so it nicely fits into your payment schedule; or prevents exporting the bills that go over the budget set in your system.


Essentially, it ensures that the bill is created correctly following your unique system rules.


Open APIs allow access to the developers to enhance the integration or customise it for specific business needs.


Overall, while it is pretty powerful for the business, it offers convenience and simplicity for the user. The connection between the two systems is usually a one-off process. It is established once, and it works without any installation. It is user-friendly, and no technical skills are required.


Cons of the API integration


Building and maintaining the API integration is an expensive exercise, and it requires highly skilled developers and an expert support team that understands your system.


Especially when it comes to ERP integrations or multi-entity organisations, the API integration must bring in more dimensions like purchase orders, receipts, and projects. Then it has to maintain the hierarchy of these elements so it works smoothly when you are working with the AP bill.


As a result, the cost of the AP solution that has a full-featured API integration is usually relatively high.


It is, however, much more efficient compared to manual invoice processing. Learn about the benefits of AP automation here.


AP Automation: The file-based integration


The file-Based integration requires manual import and export in the designated file format. It uses the Excel template to import data from one system to another.


For example, it allows the uploading of COA, rates, suppliers and more using an Excel spreadsheet provided by the AP automation software service. Here's an example of Ocerra's import template.


For export, the ready-to-go AP bills need to be downloaded and then imported to your system for payment. In Ocerra, we enhance this process by using modern tools such as Microsoft PowerShell. It allows you to automatically save approved bills on your computer in the desired format and folder.


Pros of the file-based integration


The file-based integration offers definite benefits in certain business circumstances.

For example, some ERP or accounting systems won't have an API available to integrate with. It can be on-prem or some legacy system, and file-based integration is a solution.


Also, if they do have an API on their end, the cost of the custom development can be very high. The file-based is a not expensive option that can solve the problem.


Cons of the file-based integration


It is quite manual. The user must maintain an integration by uploading data regularly; it can be once a week or once a month. Somebody needs to be trained to upload and download the data correctly in the proper format.


Finally, it doesn't offer the same automation benefits as the API integration.


The mix of API and File-based integrations


The AP automation can have file-based import and API export, for example. It can be a smart move in a situation where a legacy system allows API integration, but the cost of developing the entire integration is high.


In other scenarios, you may have a third system that keeps other important information like Purchase Orders but doesn't integrate with your key system. If you need Purchase Orders in your AP automation software, it can be much more efficient to bring them via the file-based integration compared to the API integration development.


In Ocerra, we offer API and file-based integrations to automate your accounts payable processes. Contact us today to discuss your automation goal.

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